News / Asia

Pakistan's New Government Plans $5 Billion Debt Issue

A technician is silhouetted as he works on power lines supplying electricity in the outskirts of Lahore, Pakistan, Jan. 31, 2012.A technician is silhouetted as he works on power lines supplying electricity in the outskirts of Lahore, Pakistan, Jan. 31, 2012.
x
A technician is silhouetted as he works on power lines supplying electricity in the outskirts of Lahore, Pakistan, Jan. 31, 2012.
A technician is silhouetted as he works on power lines supplying electricity in the outskirts of Lahore, Pakistan, Jan. 31, 2012.
Reuters
Pakistan's new government plans to sell $5 billion in treasury bills to pay off a chain of debt choking the country's power sector and its economy, and boost electricity output by a quarter - all within its first 100 days in power.

The incoming administration of Prime Minister-elect Nawaz Sharif has identified widespread blackouts that last up to 20 hours a day in some areas as its top political and economic challenge.

The deepening power shortages have sparked violent protests and cost hundreds of thousands of jobs in a country already beset by high unemployment, a failing economy, widespread poverty, sectarian bloodshed and a Taliban insurgency.

Several key members of the incoming government's energy team said that out of a long list of challenges ranging from lack of investment to electricity theft, plugging a 500 billion rupee [$5.08 billion] financing hole was the most pressing task.

Sources in the new administration said these funds would be raised through sales of 3-month, 6-month and 12-month treasury bills.

By breaking a vicious cycle of withheld payments running through the entire power-generation chain - from end consumers to electricity distributors, and power plants to refiners who can't import enough oil because of unpaid fuel bills - the Sharif team hopes to bring immediate relief.

“In the first three months of our government, we plan to add 2,000-3,000 megawatts to the national grid and at least 16,000 megawatts in the medium term,” said Khawaja Asif, who is due to take the energy portfolio in Sharif's cabinet that will be sworn in on June 5.

Pakistan's power sector now generates about 8,000 MW, with needs estimated at 15,000.

A “100-day roadmap” for the energy sector, due to be unveiled by Sharif on June 5, and made available to Reuters, also calls for an overhaul of a decades-old system of subsidies that is considered one of the root causes of the crisis.

100-day roadmap

“It makes no sense that you subsidize electricity at the same rate for the person who drives a Mercedes and the poor guy who rides a bicycle to work,” said Asif, who briefly served as minister for petroleum and natural resources in 2008 and headed a privatization body in a previous Sharif cabinet in the 1990s.

“People who can pay more for power will pay more. That will be the hallmark of our government's energy policy,” he said.

That, alongside a promised push to tackle electricity theft and a growing mountain of unpaid electricity bills, can set the new government on a collision course with the country's rich and influential elite.

While hooking up a cable to overhead electricity wires is the common man's way of getting power without paying for it, well-connected businessmen, politicians and even government departments simply refuse to pay their bills.

The incoming government's response is to pick competent managers to run power distribution companies and give them revenue and other performance targets.

“The priority is to appoint professional management in power distribution companies, and sack political appointees and cronies of the previous government,” said Suleman Shahbaz, Nawaz Sharif's nephew who runs the party's economic think-tank.

The sector has long been plagued by waste and allegations of endemic corruption with public funds lavished on poorly-run state power firms while more efficient independent power producers were starving for cash.

“It is mind-boggling that there was so much low-hanging fruit that the previous government didn't even bother to pick,” said Miftah Ismail, who co-authored the incoming administration's energy policy, referring to missed opportunities.

The 100-day plan is meant to buy the government time to focus on medium- and long-term solutions, such as modernization of power generators, investment in new capacity, encouraging sugar mills to use biofuels to produce electricity and finally, to reduce the nation's reliance on expensive imported oil.

“We have to move from oil to coal, hydro and gas-based power generation to bring down costs,” said Ismail. “There is no other way.”

With an estimated nationwide electricity shortfall of more than 60 percent exacerbating a balance of payments crisis, Asif said the new government is well aware of its responsibility.

“How we tackle the energy crisis will not just determine the political life of this government, but also life itself of this country,” he said. “Failure is not an option.”

You May Like

Changing Under Pressure, IS ‘Potent’ as Ever

US intel officials describe Ramadi's fall as concerning, but say it isn't emblematic of larger effort to degrade IS capabilities More

Nigeria Fuel Shortage Shows Fragility of Africa’s Oil Giant

Although it is the largest oil producer in Africa, country has nearly ran out of fuel it needs to power its generators, cars and airplanes over the past week More

Arrested Football Officials Come Mainly From the Americas

US Justice Department alleges defendants participated in 24-year scheme to enrich themselves through corruption of international soccer More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
3D Printer Makes Replica of Iconic Sports Cari
|| 0:00:00
...    
🔇
X
George Putic
May 27, 2015 9:31 PM
Cars with parts made by 3D printers are already on the road, but engineers are still learning about this new technology. While testing the possibility of printing an entire car, researchers at the U.S. Department of Energy recently created an electric-powered replica of an iconic sports roadster. VOA’s George Putic has more.
Video

Video 3D Printer Makes Replica of Iconic Sports Car

Cars with parts made by 3D printers are already on the road, but engineers are still learning about this new technology. While testing the possibility of printing an entire car, researchers at the U.S. Department of Energy recently created an electric-powered replica of an iconic sports roadster. VOA’s George Putic has more.
Video

Video US Voters Seek Answers From Presidential Candidates on IS Gains

The growth of the Islamic State militant group in Iraq and Syria comes as the 2016 U.S. presidential campaign kicks off in the Midwest state of Iowa.   As VOA’s Kane Farabaugh reports, voters want to know how the candidates would handle recent militant gains in the Middle East.
Video

Video A Small Oasis on Kabul's Outskirts Provides Relief From Security Tensions

When people in Kabul want to get away from the city and relax, many choose Qargha Lake, a small resort on the outskirts of Kabul. Ayesha Tanzeem visited and talked with people about the precious oasis.
Video

Video Film Festival Looks at Indigenous Peoples, Culture Conflict

A recent Los Angeles film festival highlighted the plight of people caught between two cultures. Mike O'Sullivan has more on the the Garifuna International Film Festival, a Los Angeles forum created by a woman from Central America who wants the world to know more about her culture.
Video

Video Kenyans Lament Losing Sons to al-Shabab

There is agony, fear and lost hope in the Kenyan town of Isiolo, a key target of a new al-Shabab recruitment drive. VOA's Mohammed Yusuf visits Isiolo to speak with families and at least one man who says he was a recruiter.
Video

Video Scientists Say Plankton More Important Than Previously Thought

Tiny ocean creatures called plankton are mostly thought of as food for whales and other large marine animals, but a four-year global study discovered, among other things, that plankton are a major source of oxygen on our planet. VOA’s George Putic reports.
Video

Video US-led Coalition Gives Some Weapons to Iraqi Troops

In a video released Tuesday from the Iraqi Ministry of Defense, Iraqi forces and U.S.-led coalition troops survey a cache of weapons supplied to help Iraq liberate Mosul from Islamic State group. According to a statement provided with the video, the ministry and the U.S.-led coaltion troops have started ''supplying the 16th army division with medium and light weapons in preparation to liberate Mosul and nearby areas from Da'esh (Arabic acronym for Islamic State group).''
Video

Video Amnesty International: 'Overwhelming Evidence' of War Crimes in Ukraine

Human rights group Amnesty International says there is overwhelming evidence of ongoing war crimes in Ukraine, despite a tentative cease-fire with pro-Russian rebels. Researchers interviewed more than 30 prisoners from both sides of the conflict and all but one said they were tortured. Henry Ridgwell reports for VOA from London.
Video

Video Washington Parade Honors Those Killed Serving in US Military

Every year, on the last Monday in the month of May, millions of Americans honor the memories of those killed while serving in the armed forces. Memorial Day is a tradition that dates back to the 19th Century. While many people celebrate the federal holiday with a barbecue and a day off from work, for those who’ve served in the military, it’s a special day to remember those who made the ultimate sacrifice. Arash Arabasadi reports for VOA from Washington.
Video

Video Kenya’s Capital Sees Rise in Shisha Parlors

In Kenya, the smoking of shisha, a type of flavored tobacco, is the latest craze. Patrons are flocking to shisha parlors to smoke and socialize. But the practice can be addictive and harmful, though many dabblers may not realize the dangers, according to a new review. Lenny Ruvaga has more on the story for VOA from Nairobi, Kenya.
Video

Video Rolling Thunder Run Reveals Changed Attitudes Towards Vietnam War

For many US war veterans, the Memorial Day holiday is an opportunity to look back at a divisive conflict in the nation’s history and to remember those who did not make it home.
Video

Video Female American Soldiers: Healing Through Filmmaking

According to the United States Defense Department, there are more than 200-thousand women serving in the U.S. Armed Forces.  Like their male counterparts, females have experiences that can be very traumatic.  VOA's Bernard Shusman tells us about a program that is helping some American women in the military heal through filmmaking.

VOA Blogs